This document is a summary translation of the Japanese language original version. In theevent of any discrepancy, errors and/or omissions, the Japanese language version shall prevail.

(Translation)
March 8, 2021

Dear Shareholder,

INTERNET DISCLOSURE OF INFORMATION FOR THE NOTICE OF THE
ORDINARY GENERAL MEETING OF SHAREHOLDERS(ITEMS DEEMED TO BE PROVIDED IN ACCORDANCE WITH LAWS AND
REGULATIONS AND THE ARTICLES OF INCORPORATION)

In accordance with laws and regulations and the provisions of Article 16 of the Company’s
Articles of Incorporation, the following matters have been omitted from the attachment to
the Notice of the Ordinary General Meeting of Shareholders for the fiscal year ended
December 31, 2020 due to their posting on the Company’s website (https://www.ccbjholdings.com/). Thank you for your understanding in this matter.

(1) “Main Businesses,” “Major Locations, etc.,” “Status of Employees,” and“Major financial institutions providing loans to the Company” within“Current Status of the Coca-Cola Bottlers Japan Holdings Group” in theBusiness Report(2) “Accounting Auditor”, “The system to ensure business adequacy” and “Basic
Policies on the Control of the Joint-stock Company” under “Current status of
the Company” in the Business Report(3) Consolidated Statements of Changes in Equity and Notes to Consolidated
Financial Statements in Consolidated Financial Statements.
(4) Non-consolidated Statement of Changes in Shareholders’ Equity and Notes to
Non-consolidated Financial Statements in Non-consolidated Financial
Statements.

1-2

3-11
12-35

36-40

1.

Current Status of the Corporate Group(1) Main Businesses (As of December 31, 2020)
Our Group operates the following businesses:
Beverage BusinessOur group manufactures and sells Coca-Cola, soft drinks and other beverage products.
The Company has contracts with The Coca-Cola Company and Coca-Cola (Japan)
Company that govern the production and sales of Coca-Cola and other products and theuse of trademarks.
Names of segments

Description

Beverage Business

Manufacturing and sales of beverage products, the vending machinerelated business, the procurement of raw materials and materials, thedevelopment, maintenance, and operations of information systems, thereal estate business, and the insurance agency business

Healthcare & Skincare Business(Discontinued operations)

Manufacture and sales of health food, cosmetics and their related
products, and investment business(2) Major Locations, etc. (As of December 31, 2020)
a. Location of the Company
Headquarters: 9-7-1 Akasaka, Minato-ku, Tokyo
b. Locations of headquarters offices of major subsidiaries:
Names

Locations

Coca-Cola Bottlers Japan Inc.

Minato-ku, TokyoFV Japan Co., Ltd.

Toshima-ku, Tokyo

Coca-Cola Bottlers Japan Vending Inc.

Higashi-ku, Fukuoka-city

Coca-Cola Bottlers Japan Business Services Inc.

Higashi-ku, Fukuoka-city

Q’SAI CO., LTD.

Chuo-ku, Fukuoka-city

Note: Q’SAI CO., LTD. is removed from the scope of consolidation of the Company after the share transfer on
February 1, 2021.

c. Major production bases(a) Beverage business
Zao Plant (Miyagi), Ibaraki Plant (Ibaraki), Iwatsuki Plant (Saitama), Saitama Plant(Saitama), Tama Plant (Tokyo), Ebina Plant (Kanagawa), Hakushu Plant (Yamanashi),
Tokai Plant (Aichi), Kyoto Plant (Kyoto), Akashi Plant (Hyogo), Daisen Plant(Tottori), Hiroshima Plant (Hiroshima),Komatsu Plant (Ehime), Kiyama Plant (Saga),
Tosu Plant (Saga), Kumamoto Plant (Kumamoto), Ebino Plant (Miyazaki)(b) Healthcare/skincare business (Discontinued operations)
Fukuoka Kounominato Plant (Fukuoka)-1-

d. Sales bases(a) Beverage business
A variety of locations in 38 prefectures within Southern Tohoku, Kanto, Koshinetsu,
Chubu, Kinki, Chugoku, Shikoku and Kyushu areas(b) Healthcare/skincare business (Discontinued operations)
The products are mainly sold through television shopping and other mail-order system.
(3)

Status of Employees (As of December 31, 2020)
Names of segments

Beverage business
Healthcare/skincare business(Discontinued operations)
Total

Number of employees

Year-on-year change

15,772

-693

502

+8

16,274-685

Note: The number of employees above shows the number of persons on active service.

(4)

Major Financial Institutions Providing Loans to the Company (As of December 31, 2020)
Names of institutions

Amount of loans

MUFG Bank, Ltd.

15,536 million yen

Sumitomo Mitsui Banking Corporation

13,464 million yen

Mizuho Bank, Ltd.

10,000 million yen

Sumitomo Mitsui Trust Bank, Limited

10,000 million yen

The 77 Bank, Ltd.

5,050 million yen

THE NISHI-NIPPON CITY BANK, LTD.

5,000 million yen-2-2. Current Status of the Company(1) Accounting Auditora.

NameErnst & Young ShinNihon LLCb.

Amount of Remuneration
Categories

Amount paid

Remuneration for services stipulated in Article 2, Paragraph 1 of
the Certified Public Accountants Act

75 million yen

Remuneration for services other than those stipulated in Article 2,
Paragraph 1 of the Certified Public Accountants Act－ million yen

Remuneration by the Company and/or its subsidiaries to the
Accounting Auditor

200 million yen

Remarks(Note)

Notes:
1. The audit contract between the Company and the accounting auditor does not distinguish between remuneration
paid for the audit conducted in accordance with the Companies Act and remuneration paid for the audit conductedin accordance with Financial Instruments and Exchange Act. Accordingly, the amount above is the aggregate
amount.
2.

The Audit and Supervisory Committee confirmed and reviewed the appropriateness and adequacy of the audit
plans, audit hours, implementation status and grounds for the estimate of the remuneration as submitted by theaccounting auditor before granting approval to the remuneration payable to the accounting auditor.

c. Contents of Non-Audit Services
The Company paid the Accounting Auditor remuneration, etc. for the preparation of acomfort letter in connection with the issuance of corporate bonds, which is a service otherthan those stipulated in Article 2, Paragraph 1 of the Certified Public Accountants Act (nonaudit service).

d. Policy on Decisions on Dismissal or Non-Reappointment of Accounting Auditor
In the case that it is reasonably judged that the accounting auditor falls under any of thedismissal events listed in the items of Article 340, Paragraph 1 of the Companies Act, theAudit and Supervisory Committee will remove the accounting auditor with the consent of
all members. In this case, a Committee member selected by the Audit and Supervisory
Committee will disclose the removal and its reason at the Meeting of Shareholders convened
for the first time after the removal.
Additionally, concerning dismissal or non-reappointment of the accounting auditor, the Audit
and Supervisory Committee shall decide contents of a proposed resolution they submit to theGeneral Meeting of Shareholders, in the event they judge it necessary to do so in cases such-3-

as where the accounting auditor is recognized to have difficulty in properly fulfilling its
auditing duties.

(2) The System to Ensure Business Adequacya. Overview of the system to ensure business adequacy
In order to establish the system to ensure that the jobs conducted by the Directors comply withthe laws and regulations and the Articles of Incorporation, and other systems to ensure
appropriateness of operation (to be referred to as “internal control” hereinafter), the Company has
made a resolution on “the Internal Control System Basic Policy” at the Board of Directors Meeting.
“The Internal Control System Basic Policy” is as shown below.
(a) System to ensure that performance of duties by Directors and employees of the Group
conforms to laws and regulations and the Articles of Incorporation① The “Code of Conduct” shall be established in order to ensure that all the Directors,
Executive Officers, and employees of the Group comply with laws and regulations andthe Articles of Incorporation to act in conformity with social norms. The Ethics &Compliance Committee shall be convened periodically in order to reinforce thecompliance system and to prevent non-compliance.
② An internal whistle-blowing system against non-compliance, namely, a reporting andconsultation contact separate from the reporting line to immediate managers, shall be
set up.
③ The oversight function of the Board of Directors shall be reinforced by adopting thecompany system where Audit and Supervisory Committee is established in order toensure auditing by the Audit and Supervisory Committee, which is comprised
exclusively of Outside Directors.
④ The department in charge of internal auditing shall be established in order to audit
whether business activities are conducted appropriately and effectively in conformity
with laws and regulations, the Articles of Incorporation, Company Rules andRegulations, etc.
⑤

The Company clearly identifies the firm stance against anti-social forces andorganizations that cause threats to the orders and safety of civil society and that theCompany never ties with such entities. The Company shall never accede to any illegal
request and deal with any such request in cooperation with the police, lawyers, etc.

(b) System to retain and manage information related to Directors’ performance of theirduties① The Company shall record information regarding minutes of General Shareholders
meetings, minutes of Board of Directors meetings, documents and other materials related-4-

to important decision-makings and Directors’ performance of their duties in documents
or electronic media and retain it in accordance with the Rules of Documentation
Handling and Information Security Policy in a manner similar to that for statutory
documents.
② The Company’s Directors may inspect such documents, etc. at any time.
(c) Regulations and other systems concerning loss risk management of the Group① In accordance with the Group policy on responding to material business risks and fromthe viewpoint of management of other risks, significant items shall be reported to the
Risk Management Committee, and the Committee shall determine policies to deal withrisks as required.
② The Company establishes rules, guidelines, etc. and maintains an organization to execute
effective response to material risks, and ensure the matters to be passed down byimplementing training for the entire Group, etc.
③ The department in charge of risk management in the Company or its subsidiaries is tomonitor the condition of company-wide risks and to take appropriate measures on agroup-wide basis. The Company promptly designates who is in charge of the response to
new risks that arise.
(d) System to ensure efficiency of performance of duties by the Group Directors① The Company’s Board of Directors shall determine Group-wide management policy andgoals shared by the Directors, Executive Officers, employees and others of the Group,and determine the efficient method to achieve the goals including the allocation of
authority based on the group’s decision-making rules.
② In addition to Board of Directors meetings, appropriate forums, such as the important
meetings held within the operating companies, shall be organized to deliberatesignificant matters affecting the entire Group, thereby ensuring that decisions are reachedbased on considerations of multi-dimensional aspects.
(e) System to ensure appropriateness of operations in a corporate group, which consistsof the Company and its subsidiaries
The Company shall ensure management integration of the Group through establishmentof a corporate philosophy, management policy, the Code of Business Conduct & Ethics
and Chart of Authority common throughout the Group and supervise and manage theperformance of the subsidiaries’ operations.
(f) Matters concerning employees assisting the Audit and Supervisory Committee to
execute the duties if the Audit and Supervisory Committee request the assignment ofsuch employees, matters concerning the independence of such employees from
Directors (excluding Directors serving on the Audit and Supervisory Committee) and-5-matters related to ensuring the effectiveness of instructions given by the Audit andSupervisory Committee to such employees
The Company shall assign employees assisting the Audit and Supervisory Committee.
Such employees shall execute the duties under the instructions given by the Audit andSupervisory Committee in assisting executions of duties by the Audit and Supervisory
Committee and shall not receive instructions from Directors (excluding Directors servingon the Audit and Supervisory Committee).
(g) System for reporting by Directors and employees of the Group to the Audit andSupervisory Committee and systems to ensure that reporting parties do not receive
disadvantageous treatment as a result of such reports① Upon discovery of any incident that could cause the Group substantial damage, such asacts in violation of laws and regulations, the Directors (excluding Directors serving on
the Audit and Supervisory Committee), Executive Officers, employees and others of theCompany shall immediately report the matter to the Audit and Supervisory Committee.
② The Internal Audit Department shall regularly report internal audit results and the statusof other activities in the Group to the Audit and Supervisory Committee.
③ The department in charge of compliance shall regularly report the status of whistleblowing in the Group to the Audit and Supervisory Committee.
④ The Company shall prohibit unjust treatment of the reporter to the Audit and Supervisory
Committee, and ensure that this matter would be informed to all the Executive Officers
and employees of the Group.
(h) Matters concerning procedures for advance payment or reimbursement of expenses
incurred in the course of performance of duties by Directors serving on the Audit andSupervisory Committee and policies related to processing expenses or liabilities arisingfrom performance of duties by Directors serving on the Audit and Supervisory
Committee
The Company establishes enough budget for Directors serving on the Audit andSupervisory Committee each year to fulfill the performance of their duties.
(i) Other systems to ensure that the Audit and Supervisory Committee’s audit is conductedeffectively① The Representative Director and the Audit and Supervisory Committee member shallhold a meeting on a regular basis to exchange opinions in order to communicate witheach other.
② The Representative Director shall prepare an environment so that the Audit andSupervisory Committee member is able to cooperate with external experts, such as
lawyers and certified public accountants, in the course of its duties whenever it deems it-6-

necessary.
③ The Audit and Supervisory Committee shall regularly provide opportunities for theexchange of opinions with the Internal Audit Department and accounting auditor.
b. Overview of the operational status of the system to ensure business adequacy(a) Initiative for ensuring compliance
The Company has developed its corporate philosophy and Code of Business Conduct &Ethics for the entire Group so that all officers and employees will comply with laws andregulations and the Articles of Incorporation to act in conformity with social norms, andnotifications are being ensured.
Additionally, CCBJH Group Ethics & Compliance Committee, chaired by the President,
is held to work upon reinforcement of the compliance structure and prevention of
occurrence of non-compliance cases.
Furthermore, Regulations for Handling Whistle-Blowing have been developed, and aninternal whistle-blowing system is being operated by establishing Ethics & Compliance
Reporting Hotline internally and at an external law office and specialized agencies to work
upon early detection and improvement of non-compliance cases.
(b) Initiative on loss risk management
The Company has developed CCBJH Group Rules of Risk Management, and is working
upon preventing occurrence of various risks that may arise for the Company. At the sametime, the Company has formulated a response strategy implemented in the eventuality ofrisk materialization, and developed a system to minimize damage and confusion forbusiness by responding to the risk promptly and adequately.
Furthermore, in order to minimize damage and impact on business caused by natural
disasters, etc., the Company periodically holds risk management drills, disaster response
drills and safety confirmation drills, verifying the effectiveness of its business continuity
plan that helps to deal with large-scale disasters.
(c) Initiative on ensuring adequacy and efficiency of the jobs conducted
The Company has established the Audit and Supervisory Committee in order to further
enrich deliberation on matters with particular importance at the Board of Directors
Meeting, whereas determination on conduct of other businesses is entrusted to the
Directors.
Additionally, authority is delegated to Executive Officers and Heads of Functions /Departments so that decisions are made regarding business conduct based on the approvalauthority standard in accordance with the Group operational structure to ensure-7-

acceleration and streamlining of management decisions made by the management
members.
(d) Initiative on ensuring that audit by the Audit and Supervisory Committee be conducted inan effective manner
The Audit and Supervisory Committee members audit the status of business conduct by
the Directors, Executive Officers, and employees in accordance with relevant laws andregulations, the Articles of Incorporation, and the Regulations of the Audit & Supervisory
Committee prepared by the Audit and Supervisory Committee by attending the Board of
Directors meeting, and by referring to the audit results, etc. provided by the department incharge of internal audit and the accounting auditor.
The Audit and Supervisory Committee members periodically exchange opinions regarding
such audit results with the Representative Directors.
(3) Basic Policies on the Control of the Joint-stock Company
Basic Policies on the Control of the Joint-stock Company are as follows.
a.

Details of Basic Policy
The Company believes that the persons who control decisions on the Company’s financial
and business policies need to understand the source of the Company’s corporate value andwill make it possible to continually and persistently ensure and enhance the Company’s
corporate value and, in turn, the common interests of its shareholders. The Company believes
that a decision on any proposed acquisition that would involve a change of corporate controlof the Company should ultimately be made based on the intent of its shareholders as a whole.
Also, the Company would not reject a large-scale acquisition of the shares in the Company if
it would contribute to the corporate value of the Company and, in turn, the common interestsof its shareholders.
However, there are some forms of large-scale acquisition of shares that benefit neither the
corporate value of the target company nor the common interests of its shareholders: thosewith a purpose that would obviously harm the corporate value of the target company and, inturn, the common interests of its shareholders; those with the potential to substantially coerce
shareholders into selling their shares; those that do not provide sufficient time or information
for the target company’s board of directors and shareholders to consider the terms of the largescale acquisition of shares, or for the target company’s board of directors to present a businessplan or an alternative proposal; and those that require the target company to discuss ornegotiate with the acquirer in order to procure more favorable terms for shareholders thanthose presented by the acquirer.

-8-

The Company believes that the persons who control decisions on the Company’s financial
and business policies need to be persons who (A) fully understand the importance of (i)providing freshness and refreshment to people around the world and embedding the “CocaCola” brand, which is now a part of our life style, in local communities; (ii) striving
aggressively to win in the market as the customers’ preferred partner with a deep
understanding of the Company’s corporate philosophy; (iii) appreciating employees who havea strong sense of responsibility to thoroughly pursue customer satisfaction, and proactively
working on building a workplace environment that can make each and every employee feelrewarded, motivated and proud of being a member of the Coca-Cola family; and (iv)contributing to local communities and proactively dealing with environmental issues with astrong sense of responsibility as a corporate citizen that continues to strive to assist in therealization of an affluent society, (B) preserve relationships of mutual trust with customers,
business partners, shareholders and employees and perform to their expectations, and (C)make it possible to continually and persistently ensure and enhance the Company’s corporate
value and, in turn, the common interests of its shareholders from a mid- to long-term
perspective.
Therefore, the Company believes that a person who would make a large-scale acquisition of
the shares in the Company in a manner that does not contribute to the corporate value of theCompany and, in turn, the common interests of its shareholders would be inappropriate to
become a person who would control decisions on the Company’s financial and business
policies.
The Company believes that it is necessary to ensure and enhance the corporate value of theCompany and, in turn, the common interests of its shareholders by taking the necessary andreasonable countermeasures against a large-scale acquisition of the shares in the Company bysuch a person.
b. Initiatives to realize the basic policies(a) Summary of special initiatives that contribute to realizing the basic policies
The Group not only assumes a leading role in transforming the Coca-Cola business in Japanby deploying various joint initiatives such as product development and test marketing with
The Coca-Cola Company and Coca-Cola (Japan) Company, Limited (100% funded by The
Coca-Cola Company) as a strategic partner, but also strives to become a company trusted
by the stakeholders of consumers, customers, shareholders and employees.
While major growth of the soft drink industry cannot be expected as the market has alreadymatured, the business environment surrounding the Company is projected to becomeharsher as the competition between the soft drink companies intensifies.

-9-Under such circumstances, the Group aims at becoming the preferred partner of ourcustomers and consumers in all drinking occasions by establishing a robust and sustainable
operating model, pursuing success in high-priority areas, and drastically transforming thebusiness to ensure growth.
The Company also made a transition to a company with an Audit and Supervisory
Committee in order to further reinforce the governance system. The Audit and Supervisory
Committee serves as the auditing body of the Company that is comprised exclusively of
external directors, including multiple independent external directors. To strengthen the
management oversight function, these external directors that serve as the member of the
Audit and Supervisory Committee have each been granted with a voting right in the Boardof Directors meetings, in addition to the right to state their opinions in shareholders’meetings on matters pertaining to the designation of board members and their remuneration,
among others. In order to separate the decision-making, business management and businessexecution functions, the Company is implementing a corporate executive officer system. In
addition to the foregoing, for more fruitful deliberations of highly important matters in the
Board of Directors meetings, the Company is delegating the authority to make decisions oncertain important matters that require prompt business executions to specific directors aswell as facilitating speedy decision making of other matters.
(b) Outline of measures to prevent inappropriate persons from controlling the finance andbusiness policy decisions of the Company in light of the basic policy
Upon any substantial acquisition of the Company shares, the Company strives to proactively
collect and timely disclose information in order to ensure and improve the corporate valueof the Company and the common interest of shareholders as well as make appropriate
measures as needed under the scope permitted by laws and regulations and the Articles ofIncorporation.
When Board Meeting determines it necessary to reapply anti-takeover measures in order toensure and improve the corporate value of the Company and the common interest ofshareholders, taking into considerations of the future trend of the society, the Company
consults with shareholders at the Meeting of Shareholders as stipulated in the Articles ofIncorporation for decision of the implementation.
c. Decisions of the Company’s Board of Directors regarding specific measures and reasons
therefor- 10 -

The measure described in the previous b. (a) was introduced as a specific measure tocontinuously and sustainably improve the corporate value of the Company and the common
interest of shareholders, and is consistent with the Company’s basic policy.
In addition, the measure described in the previous b. (b) was introduced as a specificmeasure to ensure and improve the corporate value of the Company and the common
interest of shareholders as needed under the scope permitted by laws and regulations andthe Articles of Incorporation focusing on the intention of shareholders, and it is not intended
to undermine the shareholders’ common interests or preserve the positions of the Company
officers.

- 11 -

Consolidated Statement of Changes in Shareholders’ Equity
For the fiscal year ended December 31, 2020

(Millions of yen)
Equity attributable to owners of the parent company
Accumulated othercomprehensive
Other
comprehensive income of disposal
incomegroups classified asaccumulated
for sale

Noncontrollinginterests

Capitalstock

CapitalsurplusRetainedearnings

Treasuryshares

15,232450,526

121,372(85,649)4,517－

505,999492

506,491－－(4,715)－－－(4,715)(14)(4,729)

－

－

－

－

2,502

－

2,502

－

2,502

－

－

(4,715)

－

2,502

－

(2,214)(14)(2,228)Dividends of surplus－－(4,484)－－－(4,484)(28)(4,512)

Purchase of treasury stock

－

－

－

(8)

－

－

(8)

－

(8)

Balance as of January 1, 2020
Comprehensive income forthe year
Net income (loss) for theyear
Other comprehensive
income (loss)
Total comprehensive income(loss) for the year
Transactions with owners,
etc.

Total

Total

Disposal of treasury stock

－

(1)

－

3

－

－

2

－

2

Transactions of sharebased payment

－

80

－

－

－

－

80

－

80

Reclassification fromaccumulated othercomprehensive income toretained earnings

－

－

8,300

－

(8,300)

－

－

－

－

－

－

－

－

2,268

－

2,268

－

2,268

－

－

－

－

107

(107)

－

－

－

－

79

3,816

(5)

(5,924)(107)(2,142)(28)(2,170)15,232450,605

120,473(85,654)

1,095

(107)

501,643450

502,093

Reclassification fromaccumulated othercomprehensive income tonon-financial assets
Transfer to accumulated
other comprehensive
income of disposal groups
classified as for sale
Total transactions withowners, etc.
Balance as of December 31,
2020
Note:

Amounts less than one million yen are rounded.

- 12 -

Notes to Consolidated Financial Statements(Notes to significant matters as the basis for preparation of consolidated financial statements)
1. Accounting standards of consolidated financial statements
The consolidated financial statements of the Company Group are prepared in accordancewith International Financial Reporting Standards (IFRS) pursuant to Article 120, Paragraph
1 of the Rules of Corporate Accounting.
For the consolidated financial statements, certain disclosure items required by IFRS havebeen omitted pursuant to the provision of the latter part of that paragraph.

2. Matters on the scope of consolidation(1) Number of consolidated subsidiaries: 11(2) Names of major consolidated subsidiaries
The names of major consolidated subsidiaries are as described in “(6) Status of
Significant Subsidiaries” of “1. Current Status of the Coca-Cola Bottlers Japan Group”
in the Business Report.
3. Matters on the application of the equity method(1) Number of affiliates accounted for using the equity method: 2(2) Names of affiliates accounted for using the equity method
APEX Nishi-Nihon Corporation
Resources Co., Ltd.
4. Matters on accounting standards(1) Measurement of financial assets
a. Classification and measurement of financial assets
At initial recognition, financial assets are classified as either subsequently measured
at amortized cost or at fair value. Financial assets measured at fair value throughincome or loss are initially recognized at fair value. Financial assets measured at fairvalue through other comprehensive income or at amortized cost, are initiallyrecognized at fair value plus transaction costs directly attributable to the acquisition.
The Group determines the classification under IFRS 9 based on facts andcircumstances, and designates equity instruments as equity instruments measured atfair value through other comprehensive income.
(a) Financial assets measured at amortized cost

- 13 -

Financial assets are classified as measured at amortized cost if both of thefollowing conditions are met: the objective of the Group’s business model is tohold the assets in order to collect contractual cash flows; and the contractual terms
give rise on specified dates to cash flows that are solely payments of principal andinterest on the principal amount outstanding.
(b) Financial assets measured at fair value
If any of two conditions above are not met, financial assets are classified asmeasured at fair value. For financial assets measured at fair value, the Groupmakes the determinations on an instrument-by-instrument basis whether torecognize it as measured at fair value through income or loss, or to makeirrevocable designation as measured at fair value through other comprehensive
income, except for equity instruments held for trading purposes which must be
measured at fair value through income or loss.
For derivatives, see “c. Derivatives and hedging activities.”

Financial assets are subsequently measured as follows according to their classification.
(a) Financial assets measured at amortized cost
These are measured at amortized cost using the effective interest method andadjusted for impairment loss, if any. Amortizations using the effective interest
method and gains or losses on derecognition are recognized in income or loss.
(b) Financial assets measured at fair value
These are measured at fair value at the reporting date. Changes in fair value arerecognized in income or loss or in other comprehensive income depending on theclassification of financial assets. Dividends from equity instruments designated asmeasured at fair value through other comprehensive income are recognized in
Income or loss. When equity instruments designated as measured at fair value
through other comprehensive income are disposed of, cumulative changes in fairvalue recorded in accumulated other comprehensive income are reclassified toretained earnings.
b. Impairment
The Group calculates expected credit losses at the end of each period in order toassess collectability of financial assets measured at amortized cost. For financial- 14 -

instruments whose credit risk has not increased significantly since initial recognition,
allowance for doubtful accounts is recognized at an amount of 12-month expectedcredit losses. For financial instruments whose credit risk has increased significantly
since initial recognition, allowance for doubtful accounts is recognized at an amountof lifetime expected credit losses. However, allowance for doubtful accounts for
trade receivables are always measured at lifetime expected credit losses.
Interest income of financial assets with significantly increased credit risk andobjective evidence of impairment, is calculated through multiplying the carrying
amount of the assets less allowance for doubtful accounts by effective interest rate.
The Group considers the following when determining whether objective evidence ofimpairment exists:・ significant financial difficulty of the issuer or the borrower;
・ a breach of contract, such as a default or delinquency in the payment of interestor principal;
・ granting of concession for economic or legal reasons related to the borrower’s
financial difficulty that the Group would not otherwise consider;・ increased likelihood of bankruptcy or other financial reorganization of theborrower; or・ the disappearance of an active market for that financial asset because of financial
difficulty.

The Group directly reduces the carrying amount of a financial asset when it has no
reasonable expectations of recovering the financial asset in its entirety or a portion
thereof. If the credit risk subsequently decreases and the decrease is clearly
attributable to the event occurring after the recognition of impairment (such as an
improvement in the credit rating of the borrower), the reversal of the impairment isrecognized in income or loss.

c. Derivatives and hedging activities
Derivatives are initially recognized at fair value on the date of contract, andsubsequently remeasured at fair value on each reporting date. The method to recognize
gains or losses arising from remeasurement depends on whether the derivative isdesignated as a hedging instrument and, the nature of the hedged item, if designated.

- 15 -

The Group designates certain derivatives as hedging instruments in cash flow hedge(i.e., hedge of particular risk associated with recognized asset or liability or a highly
probable forecast transaction).
At the inception of the transaction, the Group documents the relationship between
the hedging instrument and the hedged item, as well as its risk management objective
and strategy for undertaking the hedge transaction. The Group also documents its
assessment, both at the hedge’s inception and on an ongoing basis, of whether thederivative used in hedging transactions are effective in offsetting changes in cash
flows of the hedged item.
The effectiveness of a hedge is assessed on an ongoing basis, and a hedge isconsidered to be effective when all of the following requirements are met: there is an
economic relationship between the hedged item and the hedging instrument; the effectof credit risk does not dominate the value changes resulting from that economic
relationship; and the hedge ratio of the hedging relationship is the same as that
resulting from the quantity of the hedged item actually hedged and the quantity of thehedging instrument.
The effective portion of changes in fair value of a derivative designated andqualifying as a hedging instrument in cash flow hedges is recognized in othercomprehensive income. Gains or losses related to ineffective portions are recognized
in income or loss immediately.
Accumulated gains or losses recognized through other comprehensive income arereclassified into income or loss in the period in which the cash flows from the hedged
item affect income or loss. However, if a hedged forecast transaction subsequently
results in the recognition of non-financial assets (e.g. inventories, or property, plantand equipment), gains or losses previously recognized in other comprehensive income
are reclassified and directly included in the initial cost of the assets. Such amounts areultimately recognized as cost of sales in the case of inventories, and as depreciation in
the case of property, plant and equipment.
If the qualifying criteria for hedge accounting are no longer met due to the expiry
or sale of the hedging instruments, hedge accounting is discontinued prospectively. If
the hedged future cash flows are still expected to occur, accumulated gains or losses
recognized in other comprehensive income continue to be recognized as accumulated
other comprehensive income. If forecast transaction is no longer expected to occur,
gains or losses recognized in other comprehensive income are immediately- 16 -

reclassified to income or loss.
(2) Measurement of inventories
Inventories are valued at the lower of cost or net realizable value. Trade discounts,
rebates or other similar items, and interest incorporated into the nominal amount are
deducted from the cost. The production costs include the costs of direct materials andany direct labor and manufacturing overheads. Net realizable value represents theestimated selling price less the estimated costs necessary to make the sale and the costs
incurred in marketing, sale and distribution.
(3) Measurement and depreciation or amortization of property, plant and equipment andintangible assets
a. Property, plant and equipment (excluding lease)
Property, plant and equipment is measured initially at cost and subsequently carriedat the cost less of any accumulated depreciation and any accumulated impairment
losses.
Costs incurred to enlarge, upgrade or improve the items which increase productivity,
capacity or efficiency, or extend the useful lives of the assets are capitalized as anincrease in the cost of the related asset, while repairs and maintenance expenses arecharged to expense as incurred.

The depreciable amount is the cost of the asset less the respective estimated residual
values. The Group depreciates its property, plant and equipment primarily using thestraight-line method over the estimated useful lives, as follows:
Years of estimated useful lives
Buildings and Structures

2 – 60Machinery, Equipment andVehiclesVending machines

2 – 20
4–9

The depreciation method, estimated useful lives and residual values are reviewed at
the end of each reporting period, and any necessary changes are applied prospectively
as a change in accounting estimate. The Group does not depreciate its land andconstruction in progress.
b. Goodwill
Goodwill arising from a business combination is not amortized and is subsequently
measured at cost less any impairment losses. It is tested for impairment annually andif events or changes in circumstances indicate a potential impairment.

- 17 -

For the purpose of impairment testing, goodwill is allocated to each CGU, which is
expected to benefit from the synergies of the combination. A CGU is the smallest
group of assets that generates independent cash inflows, which is smaller than businesssegments. Each CGU to which the goodwill is allocated represents the lowest levelwithin the entity at which the goodwill is monitored for internal management purposes.
When the impairment test shows that the recoverable amount of the CGU is lessthan its carrying amount, the impairment loss is recognized for the difference, whichis allocated first to reduce the carrying amount of any goodwill allocated to the CGU,
and then to the other assets of the CGU pro rata on the basis of the carrying amount ofeach asset within the CGU. Any impairment loss on goodwill is recognized in income
or loss and is not reversed in subsequent periods.
c. Intangible assets
An intangible asset is an identifiable non-monetary asset without physical substancefrom which future economic benefits are expected to flow to the Group. Intangible
assets are initially recognized at cost or production cost. After initial recognition,
intangible assets are carried at cost less accumulated amortization and any
accumulated impairment losses. The Group assesses whether the useful life of theintangible asset is identifiable and, if identifiable, evaluates the useful life based on
the period over which the asset is expected to be used.
Intangible assets acquired separately are measured at cost at initial recognition.
Intangible assets acquired in a business combination are recognized separately fromgoodwill and are measured at fair value at the acquisition date when such assets meetthe definition of intangible asset and are identifiable, and their fair values can bemeasured reliably. Expenses incurred for the acquisition of software is carried as
intangible assets. Development costs for internally developed software are carried as
intangible assets when it is technically feasible and it is more likely than not that future
economic benefits will flow to the Group.
Major intangible assets with identifiable useful lives are software and theamortization is determined using the straight-line method over their estimated useful
lives (5-10 years).
The amortization methods estimated useful lives and residual values are reviewed
at the end of each reporting period, and any necessary changes are applied
prospectively as a change in accounting estimate.

- 18 -

Contract related intangible assets
The Group’s contract related intangible assets associated with the acquisition of
Coca-Cola East Japan Co., Ltd. are the contracts entered into with The Coca-Cola
Company (“TCCC”) and related to the Group’s exclusive rights to manufacture,
distribute and sell under Coca-Cola brand in certain areas.
The term of the contract is 10 years and it will be automatically renewed without
review for renewal or extension.
The Group accounts for contract related intangible assets attributable to the bottlingcontract as intangible assets with indefinite useful lives. The Group believes that it isunlikely that it will not renew or extend the contract considering prior relationships
with TCCC and the possible adverse effects on franchisors from non-renewal of thecontract. Accordingly, there are limitations in predicting the period over which theassets may generate net cash flows.
Contract related intangible assets are not amortized, but are tested for impairment
annually and if events or changes in circumstances indicate a potential impairment.

d. Leases (as a lessee)
When concluding a contract, the CCBJI Group determines whether the contract is,or contains, a lease. A contract is, or contains, a lease if the contract conveys the rightto control the use of an identified asset for a period of time in exchange forconsideration.
The CCBJI Group recognizes right-of-use assets and lease liabilities at thecommencement date of the lease. Right-of-use assets are measured at cost on thecommencement date. After the commencement date, the right-of-use assets aremeasured at cost less any accumulated depreciation and any accumulated impairment
losses using a cost model. The lease period of the right-of-use asset is estimated as the
non-cancellable lease period, together with both periods covered by an option toextend the lease if the lessee is reasonably certain to exercise that option; and periods
covered by an option to terminate the lease if the lessee is reasonably certain not toexercise that option. Right-of-use assets are depreciated by using the straight line
method, generally over 15 years from the commencement date.
Lease liabilities are measured on the commencement date at the present value of thelease payments that have not been made as of that date. After the commencement date,the carrying amount of the lease liabilities are adjusted to reflect the interest rate on- 19 -

the lease liabilities and the lease payments made. If the lease liabilities are revised or
the terms of the lease are changed, the lease liabilities will be remeasured and the rightof-use asset will be revised.
(4) Criteria for recording significant provisions
Provisions are recognized when the Group has present legal or constructive obligation
as a result of past events, it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation, and a reliable estimate can be made of theamount of the obligation.
Provisions are measured at the present value of the amount required to settle or transfer
the obligation based on the best possible estimation, taking into account the information
available on the event and its consequences. Adjustments arising from discounting theprovision are recognized as finance costs when accrued.
(5) Employee benefits
a. Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided. A
liability is recognized for the amount expected to be paid if the Group has a present
legal or constructive obligation to pay the amount as a result of past service provided
by the employee and the amount can be estimated reliably.
b. Defined contribution plans
Contributions to defined contribution plans are recognized as expenses for a periodof employees’ providing services.
c. Defined benefit plans
The Group’s net obligation related to defined benefit plans is calculated separately
for each plan by estimating the amount of future benefit that employees have earnedin the current and prior periods, discounting that amount and deducting the fair valueof any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified
actuary using the projected unit credit method.
Remeasurements of defined benefit obligations, which comprise actuarial gains andlosses, the return on plan assets (excluding interest) and the effect of the asset ceiling,
are recognized immediately in other comprehensive income and directly reclassified
to retained earnings from accumulated other comprehensive income. The Group
determines the net interest expense (income) on defined benefit obligations for the- 20 -

current reporting period by multiplying the discount rate used to measure the defined
benefit obligations (assets) at the beginning of the period by the defined benefit
liabilities (assets) and any plan assets.
Any changes in defined benefit obligations (assets) during the period as a result ofcontributions and benefit payments are taken into consideration when calculating thedefined benefit obligations (assets) at the beginning of the period. Net interest expenseand other expenses related to defined benefit plans are recognized in income or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting
change in benefit that relates to past service or the gain or loss on curtailment isrecognized immediately in income or loss. The Group recognizes gains and losses on
the settlement of a defined benefit plan when the settlement occurs.
d. Long-term employee benefits
A liability is recognized for the amount expected to be paid under long-term
employee benefits, if the Group has a present legal or constructive obligation to pay
the amount as a result of past service provided by the employee and the amount canbe estimated reliably. The Group’s long-term employee benefits are calculated bydiscounting the estimated future benefit to its present value.
The discount rate is determined based on the market yield of AA-rated corporate
bonds at the reporting date, whose remaining period approximates the averageremaining service period of employees.
(6) Accounting of consumption tax, etc.
It is based on the before-tax method.
(7) Recognition of revenue
The Group recognizes revenue from contracts with customers by applying the following
five steps, except for interest and dividend revenue which is accounted for under
IFRS 15:
Step 1: Identify the contracts with customers
Step 2: Identify the performance obligation in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligation in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performanceobligation
The Group sells carbonated beverages, coffee, blended tea, mineral water, other softdrinks. Revenue from these products is generally recognized upon delivery, as the- 21 -

performance obligation is considered to be satisfied upon delivery when the customer
obtains control over these products. Revenue is measured at the consideration promisedin contracts with customers less discounts, rebates and returns.
（8）Assets held for sale and discontinued operations
Non-current assets or discontinued groups whose carrying amount will be recovered
primarily through a sale transaction, rather than through continuous use, are classified asheld for sale. To be classified as held for sale, a company must be available for immediatesale in its current state and the probability of such a sale must be very high, provided that
the Group’s management is committed to implementing the sale plan and that the sale isgenerally expected to be completed within one year. Once classified as held for sale, they
are measured at the lower of carrying amount or fair value less costs to sell and are notdepreciated or amortized
Discontinued operations include those components of an entity that have been disposedof or classified as held for sale, and are classified as such if they comprise one of theGroup’s businesses or geographical areas and there are plans to dispose of that one businessor geographical area.
（9）Government Grants

Government grants are measured at fair value when there is reasonable assurance thatthe conditions attached to them are met and the grants will be received. Government grants
relating to revenue are recognized in profit or loss over the period in which the related
costs intended to be compensated by the grant are recognized as an expense, and arerecorded as other income. Government grants related to an asset are reduced directly whencalculating the carrying amount for the asset.
Grants are recognized in profit or loss as a reduction of depreciation expense over theuseful life of the applicable depreciation asset.

（Additional information）
The Japanese government declared a renewed state of emergency in January 2021 due to the rapidly
increasing COVID-19 infection rate, and this situation is expected to continue and there are many
uncertainties related to the impact of the ongoing COVID-19 pandemic. As it is difficult to makea reasonable estimate of the specific impact of this, including the timing of a reduction in infection
rate and the impact on the market, accounting estimates have been made on the assumption that
this impact will continue over a certain period of time in the year ended 31 December 2021.

- 22 -

(Notes regarding Consolidated Statement of Financial Position)
Accumulated depreciation of property, plant and equipment and right-of-use assets:350,791 million yen(Notes regarding Consolidated Statement of Income)
Other income includes 2,520 million yen of government subsidies to cover employee’s temporary
leave cost due to the spread of COVID-19 and 5,201 million yen of gain on sale of property, plantand equipment. Other expenses include 3,923 million yen of temporary paid leave expenses, 4,631
million yen of Loss on sales of tangible fixed assets, 4,546 million yen of transformation-related
expenses and special retirement allowances of 7,969 million yen.

(Notes regarding Consolidated Statement of Changes in Shareholders’ Equity)
1. Matters related to the total number of issued and outstanding shares

Type of shares

Number of shares
as ofJanuary 1, 2020

Number ofincreased shares forthe current
consolidated fiscal
year

Number of
decreased sharesfor the current
consolidated fiscal
year

Number of sharesat the end ofcurrent
consolidated fiscalyear

206,269
thousand shares––

206,269
thousand shares

Commonstock

2. Matters concerning dividends of surplus(1) Dividends paid
Resolution

Type of shares

Total amountof dividends(million yen)March 26, 2020
Ordinary general
meeting ofshareholders

Common stock

4,484- 23 -

Dividend
per shareamount (Yen)

Reference date

Effective date

25 December 31, 2019 March 27, 2020

(2) Among the dividends whose reference dates belong to the current consolidated fiscal
year, the dividends whose effective date come after the end of the current consolidated
fiscal year.
Resolution

Type ofsharesTotal amountof dividends(million yen)

Source ofdividends

Dividend
per shareamount(Yen)

Reference date

Effective date

March 25, 2021
Ordinary general
meeting ofshareholders

Common
stock

4,484

Retainedearnings

25

December 31,
2020

March 26,
2021

(Notes regarding revenue)
The Group’s organizational structure is based on one business, the Beverage business. Thisbusiness are components for which discrete financial information is available, and whose
operating results are regularly reviewed by the entity’s Board of Directors (chief management
decision maker) to make decisions about resources to be allocated to the segment and assess its
performance. Therefore, the revenue in these two businesses are presented as “Revenue” in the
consolidated financial statement of profit and loss. In the Beverage business, the Group purchases,
manufactures, and sells carbonated beverages such as Coca-Cola, coffee beverages, black tea
beverages, mineral water and other beverages in Japan.
Revenue for sales of these products is recognized primarily at the time of delivery as the customer has
obtained control over the products and the performance obligation is satisfied.
Payments relating to such performance obligations are received generally within two months ofdelivery. The contracts with customers do not include any material financial elements.

The contract liabilities, refund liabilities, amount of assets recognized from the costs of obtaining
a contract or to fulfill a contract and amount of revenue recognized from performance obligations
satisfied in prior periods were immaterial. In addition, information regarding the remaining
performance obligations is omitted as there are no significant transactions in which the estimatedindividual contract periods exceed one year in the Group.

- 24 -

The breakdown of revenue is as follows.
(Millions of yen)

Beverage
Other
Total

Reportablesegments
Beverage business
791,193763
791,956(Notes regarding financial instruments)
1. Matters concerning the situation of financial instruments(1) Financial risk management
The Group is exposed to the following risks arising from financial instruments which are
discussed below.
・ Credit risk
・ Liquidity risk・ Market risk
The Group faces a variety of financial risks (credit risk, liquidity risk and market risk
(share price risk, interest rate risk, foreign exchange risk and price risk)) in its operations.
The Group manages its risks based on established policies to prevent and reduce thesefinancial risks. The Group’s risk management policies are established to identify andanalyze the risks faced by the Group, to set appropriate risk limits and controls and tomonitor risks and adherence to limits. Risk management policies and systems are regularly
reviewed to reflect market conditions and the business activities of the Group. The Group
offers training and develops manuals and procedures to maintain control environment inwhich all employees understand their roles and disciplines.
Based on the Group’s risk management policy, derivatives are used to hedge certain risk
exposures. The Group’s policy is to use derivatives for hedging foreign exchange risk andprice risk, but not for speculative transactions. The Company’s finance division identifies,
evaluates and hedges financial risks.
a. Credit risk
Credit risk is the risk that one party to a financial instrument will be unable to meetits obligations and the other party will incur financial losses. In the course of the Group’sbusiness, trade and other receivables and other financial assets (including deposits paid,
marketable securities and other receivables) are exposed to the credit risk of- 25 -

counterparties. The carrying amount of the financial assets presented in the consolidated
financial statements after impairment is the maximum exposure to credit risk of theGroup of financial assets that does not take into account the appraised value of collateralacquired. In addition, with respect to certain counterparties, we have no significant
exposure to credit risk and there are no undue concentrations of credit risk that we havespecifically managed.
In order to manage credit risk, the Group manages payment dates and balances bycustomer in accordance with internal customer management regulations, and monitors
the credit standing of major customer on a regular basis. In order to mitigate credit risk
in derivative transactions, in principle, the Group only transacts with financial
institutions with high credit ratings.
In addition, the Group determines the allowance for doubtful accounts based on its
credit risk profile. For trade receivables, the Group measures the allowance for doubtful
accounts at the same amount as lifetime expected credit losses. For receivables otherthan trade receivables, the allowance for doubtful accounts is generally measured at an
amount equal to the 12-month expected credit losses. However, when the credit riskincreases significantly from the initial recognition, the allowance for doubtful accounts
is recognized at an amount equal to the lifetime expected credit losses. The Group
determines whether or not credit risk has significantly increased based on changes in
the risk of default, considering factors such as information of past due date anddeterioration in the financial condition of the obligor. All receivables other than tradereceivables for which the allowance for doubtful accounts is measured at an amountequal to the 12-month expected credit losses are measured on a collective basis.
The amount of expected credit losses on trade receivables is calculated based on thesimplified approach and entails first classifying the receivables according to the credit
risk characteristics of the counterparty, and then multiplying each respective receivable
by a provision rate that is determined by adding projection of future economic
conditions to the historical rate of credit losses for the specific risk classification.
The amount of expected credit losses on receivables other than trade receivables iscalculated based on the principle approach and entails two different methods depending
on risk assessment. For receivables for which credit risk has not been considered to haveincreased significantly, the carrying amount is multiplied by the provision rate that isdetermined by adding projection of future economic conditions to the historical rate ofcredit losses of similar assets. For expected credit losses on assets that are deemed tohave significantly increased credit risk and credit-impaired financial assets, theexpected credit loss is measured as the difference between the present value of estimated- 26 -

future cash flow discounted at the initial effective interest rate of the asset, and its
carrying amount.
b. Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting theobligations associated with its financial liabilities that are settled by delivering cash orother financial assets. The Group’s approach to managing liquidity is to ensure that it
will have sufficient liquid assets to meet its obligations when due, under both normal
and stressed conditions, without incurring material losses or risking damage to theGroup’s reputation. The finance headquarters of the Company mainly manages theGroup’s liquidity risk by maintaining an appropriate level of retained earnings andcredit facilities, and monitors the actual and forecasted cash flows.
c. Market risk
Market risk is the risk that changes in market prices – such as interest rates and equity
prices – will affect the Group’s income or the value of marketable securities it possesses.
The objective of market risk management is to manage and control market risk exposure
within acceptable parameters while optimizing the return.
(a) Interest rate risk
The majority of the Group’s loans and bonds are under fixed interest rates, andthe impact of interest rate fluctuation risk on the Group’s income or loss is limited.
Therefore, the Group considers that the interest rate risk is immaterial and has not
performed a sensitivity analysis such as basis point value.
(b) Share price risk
The Group is exposed to share price risk as a result of its holdings of equity
securities. Equity securities are held for purposes other than trading, and are mainlyclassified into financial assets measured at fair value through other comprehensive
income.
(c) Foreign exchange risk
The Group is exposed to foreign exchange risks, particularly relating to U.S.
dollars, because Coca-Cola Bottlers Japan Inc., which is the Company’s
consolidated subsidiary, purchases raw materials denominated in foreign
currencies. Foreign exchange risks arise from forecast transactions, such as futurepurchases, or from assets and liabilities already recognized. The Group uses
forward exchange contracts to hedge foreign exchange risk. Hedge accounting is- 27 -

applied to transactions that qualify for hedge accounting. Receivables and payables
denominated in foreign currencies are subject to the risk of foreign exchange rates
fluctuations. However, the impact of this risk is limited as it is offset by forward
exchange contracts and other transactions.

(d) Price risk
Coca-Cola Bottlers Japan Inc., which is the Company’s consolidated subsidiary,purchases raw materials that are subject to price fluctuations due to weather, natural
disasters and other factors. Therefore, the Group is exposed to price risk of raw
materials. The Group engages in commodity swap transactions to mitigate risks offluctuations in raw materials prices.
2. Classification by level of the fair value hierarchy(1) Classification by level of the fair value hierarchy
Financial instruments measured at fair value on a recurring basis after initial recognition areclassified into three levels of the fair value hierarchy, depending on the observability andsignificance of the inputs used in the measurement.
The fair value hierarchy is defined as follows:
Level 1: fair value (unadjusted) in the active market of the same asset or liability
Level 2: fair value based on inputs other than quoted prices included in Level 1, either
directly observable inputs or indirectly, of observable inputs for asset or liability
Level 3: fair value based on unobservable inputs for asset or liability
When more than one input is used to measure the fair value, the level of the fair value
hierarchy is determined based on the lowest level of input that is significant to the fair value
measurement as a whole. Transfers between levels of the fair value hierarchy are recognized
as having occurred at the beginning of each quarter.
There were no transfers between Level 1 and Level 2 during the third quarter of the prioryear and third quarter of the current year.
(2) Fair value measurement
Securities are classified as Level 1 of the fair value hierarchy by the measurement of shareprices, if any, in active market for the same asset or liability. If there is no active market stock- 28 -

price for the same asset or liability, the Group uses valuation techniques such as stock prices
in non-active markets, quoted market prices of similar companies anddiscounted future cash flow models. If significant inputs, such as quoted market prices anddiscount rates used in measurement are observable, such financial instruments are classified
as Level 2, but are classified as Level 3 if inputs used in its measurement include significant
unobservable inputs.
Unlisted securities are classified into Level 3 of the fair value hierarchy using valuation
techniques based on discounted future cash flows, valuation techniques based on quoted
market prices of similar companies, valuation techniques based on net asset value, and othervaluation techniques. In the fair value measurement of unlisted securities, the Group uses
unobservable inputs such as discount rates and valuation multiples and considers certain
illiquidity discounts and non-controlling interest discounts as needed. The measurement
methods for such fair value are determined by the Finance division in accordance with theGroup’s accounting policies.
The valuation techniques and significant unobservable inputs used in Level 3 fair value
measurement are as follows:Type
Financial instrument measured
at fair value through othercomprehensive income(Securities)

Significant unobservable inputs

Interactions between significant
unobservable inputs and fair value
measurement

EBIT Multiple: 6.7−46.7 times
Comparison of similar
EBITDA Multiple: 12.6 times
companies
PBR: 1.0−3.0 times

Estimated fair value increases(decreases) when equity indices ofcomparable listed companies of thetarget are high (low)Valuation technique

EBIT Multiple: Corporate Value/EBIT
EBITDA Multiple: Corporate Value/EBITDAPBR: Price Book Value Ratio- 29 -

(3) Financial instrument measured fair value on a recurring basis
The breakdown of financial instrument measured at fair value on a recurring basis is asfollows(Millions of yen)

Level 1

Level 2

Level 3

Total

Financial assets
Financial instrument
measured at fair value
through profit or loss:
Derivative assets
Subtotal
Financial instrument
measured at fair value
through othercomprehensive income:Securities
Other
Subtotal
Total

−
−

654
654

−
−

654
654

15,337−
15,337
15,337

−
−
−
654

4,561
133
4,694
4,694

19,898133
20,031
20,685

Financial liabilities
Financial instrument
measured at fair value
through profit or loss:
Derivative liabilities
Total

−
−

1,013
1,013

−
−

1,013
1,013

A reconciliation of the beginning and ending balances of financial instrument classified as
Level 3 is as follows:
Financial assets measured at fair value through othercomprehensive income

Balance at January 1, 2020

5,392

Disposals(8)

Losses recognized in other comprehensive
income(441)

Reclassification to disposal groups classified
as for sale

(249)
4,694

Balance at December 31, 2020

- 30 -

(4) Financial instrument measured at amortized cost
The amount recorded on consolidated statement of financial position as of December 31,
2020 fair values and the difference between these amounts are as follows.
Amount recorded on
consolidated statement offinancial position(million yen)

Long-term loans payable and bonds

Fair values(million yen)

188,585

Difference in amount(million yen)

188,075(Note) Long-term loans payable and bonds payable include the current portion of long-termloans payable and bonds payable. In addition, financial instruments whose fair values
approximate their carrying values are not included in the table above.
The principal valuation techniques used for fair value measurements of financial
instruments are as follows.
Loans payable
For loans payable with variable interest rates, fair values are deemed as their carrying
amounts, as the rates reflect the market interest rate within the short term. For loans payable
with fixed interest rates, the fair value is calculated using the present value of future cash flows
discounted using the current interest rate adjusted for the remaining maturity period and credit
risk.
Bonds payable
For bonds payable with quoted price, the fair value is estimated based on the quoted prices.
For bonds payable without quoted prices, the fair value is calculated using the present valueof future cash flows discounted using the current interest rate adjusted for the remaining
maturity period and credit risk.

- 31 -

510

(Disposal groups classified as held for sale and discontinued operations)
On December 15, 2020, the Company’s Board of Directors resolved to sell all of the shares of
the Company’s consolidated subsidiary, Q’sai Co., Ltd. (“Q’sai”) to Q-Partners Co., Ltd. (the“Acquiring Company”), a company formed for this purchase led by investment funds in which
Advantage Partners Inc. provides services (“Advantage Partners”), euglena Co., Ltd., and Tokyo
Century Corporation, and entered into a share transfer agreement with the Acquiring Company
as of the same day.
As a result of executing the share transfer agreement, Q’sai was classified as discontinued
operations from the fiscal year ended December 31, 2020.

- 32 -

(1) Disposal groups classified as held for sale

The breakdown of disposal groups classified as held for sale is as follows(Millions of yen)

As ofDecember 31, 2020）

AssetsCurrent assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other financial assets
Other current assets
Total current assets

11,599
1,308
2,031
3
61
15,001

Non-current assets
Property, plant and equipment
Right-of-use assets
Goodwill
Intangible assets
Other financial assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Lease liabilities
Income taxes payable
Other current liabilities
Total current liabilities

2,931
1,197
27,021
778
322
880
6
33,137
48,138

2,940
155
610
1,886
5,591

Non-current liabilities
Lease liabilities
Net defined benefit liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities

1,088
366
148
1,602
7,193

- 33 -

(2) Profit/loss from discontinued operations
The results of discontinued operations are as follows(Millions of yen)
For the year ended
December 31, 2020

Discontinued operations
Net sales
Cost of sales
Gross profit
Operating cost
Operating profit
Financial revenue
Finance costs
Income for the year before income taxes
Income tax expense
Net income for the year fromdiscontinuing operations

24,773
5,030
19,743
16,188
3,555
1
11
3,545
1,126
2,418

(Per share information)
Equity attributable to owners of the parent per share

2,797.03 yen

Earnings(loss) per share(26.29) yen

Continued operations(39.76) yen

Discontinued operations

13.47 yen

(Significant subsequent events)（Transfer of shares in subsidiaries）
The Company’s Board of Directors resolved to sell all of the shares of the Company’s
consolidated subsidiary, Q’sai Co., Ltd to Q-Partners Co., Ltd. (“the Acquiring Company”),
a company formed for this purchase led by investment funds in which Advantage Partners
Inc. provides services, euglena Co., Ltd., and, Tokyo Century Corporation on December 15,
2020 and sold all of the shares of the Company’s consolidated subsidiary, Q’sai Co., Ltd. on
February 1, 2021.

As a result, Q’sai is removed from the scope of consolidation of theCompany.
1. Reasons for the share transfer
The Company has been evaluating future opportunities for growth and operating synergies
for the health and skincare business. We determined that the best way to support the next
era of growth for this business is to sell Q’sai to Q-Partners Co., Ltd. and entered into ashare transfer agreement with Q-Partners Co., Ltd.

- 34 -

2. Overview of the subsidiary (Q’sai) to be sold(1)
Name
Q’sai Co., Ltd.
Manufacture and sale of healthcare products, skincare products,(2)
Description of businesses
etc.
The Company has a business relationship with Q’sai,(3)Transaction details
including the purchase of products and raw materials, andborrowing and lending of funds.
3. Name of the company to which the shares will be transferred
Q-Partners Co., Ltd.
4.Number of shares to be sold, selling price and status of shares held before and after the transaction
(1)
(2)
(3)
(4)
(5)

Shares owned by the Company
prior to the transaction
Number of the shares to be soldSelling priceGain on sale
Shares owned by the Company
after the transaction

302,755 shares(Voting rights the Company owns: 100%)
302,755 shares
Approximately 37.8 billion
Approximately 12.5 billion
0 shares(Voting rights the Company owns: 0%)- 35 -

Non-consolidated Statement of Changes in Shareholders’ Equity
For the fiscal year ended December 31, 2020
Shareholders’ equity
Additional paid-in capital

Retained earnings

Capitalreserve

Other
additional
paid-in
capitalTotal
additional
paid-in
capitalOther
retainedearnings(Note 1)

Total retained
earnings

Treasury
stock

Total
shareholders’equityTotal net
assetsLegal reserve

15,232

108,167

158,784

266,951

3,317

131,289

134,606 △85,649

331,139

331,139

Dividends of surplus

−

−

−

−

−

(4,484)(4,484)−(4,484)(4,484)

Income−−−−− 15,742

15,742−

15,742

15,742

Withdrawal of reserves

−

−

−

−

−

−

−

−

−

−

Acquisition of treasury
stock

−

−

−

−

−

−

−

(8)

(8)

(8)

Disposal of treasury
stock

−

−

(1)

(1)

−

−

−

3

2

2

(Net) Changes in items
other than shareholders’equity during this term

−

−

−

−

−

−

−

−

−

−

Total changes during this
term

−

−

(1)

(1)

− 11,258

11,258(5)

11,252

11,252

15,232

108,167

158,783

266,950

145,864(85,654)342,391

342,391

Commonstock

Balance as of Jan. 1, 2020
Changes during this term

Balance as of Dec. 31,
2020

3,317

Note 1: Breakdown of other retained earnings(Millions of yen)
Other retained earnings

Generalreserve

Retainedearnings to
be carriedforward

Total otherretainedearnings

761

110,388

20,140131,289

Dividends of surplus－－

4,484)

4,484)

Income－－15,742

15,742

Withdrawal of reserves

(84)

－

84

－

Acquisition of treasury
stock

－

－

－

－

Disposal of treasury stock

－

－

－

－

(Net) Changes in items
other than shareholders’equity during this term

－

－

－

－

Total changes during this
term

(84)

－

11,343

11,258

Balance as of Dec. 31, 2020

677

110,388

31,482

142,547

Reserve foradvanceddepreciation
Balance as of Jan. 1, 2020
Changes during this term

Note 2: Amounts less than one million yen are rounded.

- 36 -

142,547

Notes to Non-Consolidated Financial Statements(Notes on matters concerning significant accounting policies)
1. Valuation standards and methods for securities(1) Securities held to maturity
Amortized cost method (straight-line method) is applied.
(2) Shares of subsidiaries and affiliated companies
Cost method based on the moving average method is applied.
(3) Other securities
Securities with available market values:
Market value method based on the market price, etc. at the fiscal year-end of the current term
is applied. (Valuation differences are to be reported as a component of shareholders’ equity,and the costs of securities sold are to be calculated by the moving average method)
Securities without available market values:
Cost method mainly based on the moving average method is applied.
2. Depreciation method used for fixed assets(1) Tangible fixed assets
Useful lives of major items below are calculated as follows, based on the straight-line method.
Buildings

2-50 years(2) Intangible fixed assets
Straight-line method is applied.
3. Basis for recording allowances
Provision for performance-linked compensation
In order to prepare for the payment of shares and cash for Executive Directors and Executive
Officers, the Company records an estimated payment amount as of the end of this fiscal year.
4. Other significant matters for preparation of the non-consolidated financial statements
Accounting treatment for consumption tax, etc.
Before-tax method is applied- 37 -

(Notes to the Non-Consolidated Balance Sheet)
1. Amount of accumulated depreciation of tangible fixed assets

65,184 million yen

2. Monetary receivables from or payables to subsidiaries and affiliates (excluding the items
stated separately in the Balance Sheet)
Short-term monetary receivables

112 million yen

Short-term monetary payables

12,766 million yen(Notes to Non-Consolidated Statement of Income)Transaction amount with affiliated company
Operating expenses

19,202 million yen

Others (non-operating transactions)

86 million yen(Notes to Non-Consolidated Statement of Changes in Shareholders’ Equity)
Matters concerning class and total number of treasury shares
Type of shares
Common shares

Shares as ofJanuary 1, 2020

Increase in sharesfor fiscal year 2020

Decrease in sharesfor fiscal year 2020

Shares as ofDecember 31, 2020

26,917thousand shares

4 thousand shares

1 thousand shares

26,920thousand shares

1. The increase of 4 thousand shares in the common shares of treasury stock is due to the purchase of shares basedon a resolution of the Board of Directors and the purchase of shares constituting less than one unit.
2. The decrease of thousand shares in the common shares of treasury stock is due to additional purchase of sharesconstituting less than one unit.

- 38 -

(Notes on deferred tax accounting)Breakdown of deferred tax assets and deferred tax liabilities by main cause
Deferred tax assets
Depreciation

2,096 million yen

Subsidiary shares

187 million yen

Impairment loss

232 million yen

Other

643 million yen

Sub-total of deferred tax assets

3,157 million yen

Allowance for evaluation losses(355) million yen

Total deferred tax assets

2,802 million yen

Deferred tax liabilities
Reserve for advanced depreciation(926) million yen

Valuation difference on land

(1,260) million yen

Other(76) million yen

Total deferred tax liabilities(2,261) million yen

Net deferred tax assets

540 million yen(Notes on transactions with related parties)
Subsidiaries, etc.
Type

Subsidiary

Name ofcompany

Address

Coca-Cola
Bottlers
Japan Inc.

Minato-ku,
Tokyo

Capital or investment
amount(million yen)100

Line of business

Manufacture andsales of beverageand food products

Ownership of voting
rights (%)

100.0

Relationship
Interlocking
directorate

2

Businessrelationship

Description oftransaction

Lendingof funds

Lending of
funds

Net
revenuesNet
revenues

Transaction
Accounting Year-end balance
amountitem(million yen)(million yen)

－

6,233

Receivables fromsubsidiaries andaffiliates－(Notes)1. The transaction amount does not include consumption tax. Year-end balance includes consumption tax, etc.
2. Transaction terms and conditions and the policy for deciding on these terms and conditions
Terms and conditions for the transaction with Coca-Cola Bottlers Japan Inc.
With regard to the lending of funds, the interest rate on loans is determined in consideration of market interest
rates. In addition, the Company has adopted a cash management system for the purpose of improving thegroup’s funds efficiency. Also, transaction amounts are stated in net value.
Regarding net revenues, it is accompanied by real estate leasing and is determined based on certain rational
standards.

- 39 -

128,535－

(Notes on impairment loss)
In the fiscal year under review, the Company recorded an impairment loss on the following asset
groups.
RegionUse

Number ofType

locations

Kinki

Idle asset

2

KyushuIdle asset

4

Impairment loss
（million yen）

Buildings

0

Land

1

Buildings

17

Land

41

The Company has divided assets for business use into groups by business unit thatgenerates cash continuously based on management accounting system. As for rental
property and idle assets, each individual property is recognized as the smallest grouping
unit in order to detect and judge any sign of impairment.
For the current fiscal year, of the idle assets of which market value, etc. decreased, thebook values of certain pieces of land in the target locations are reduced to theirrecoverable amounts, and the amount of reduction is recognized as impairment loss.
The recoverable amounts of idle assets are calculated based on the valuation by realestate appraiser, etc.
(Notes on per share information)
Net assets per share

1,909.09 yen

Income per share

87.77 yen

(Significant subsequent events)（Transfer of shares in subsidiaries）
The Company announced that the Company’s Board of Directors resolved to sell all of theshares of the Company’s consolidated subsidiary, Q'sai to Acquiring Company, a company
formed for this purchase led by investment funds in which Advantage Partners Inc. provides
services, euglena Co., Ltd., and, Tokyo Century Corporation on December 15, 2020, andentered into a share transfer agreement with the Acquiring Company and sold on 1 February2021.
For further details, please refer to the notes to the consolidated financial statements(Significant subsequent events).

- 40 -